How Digital Capabilities Can Humanize Large Insurance Enterprises

This article is part of Carrier Management’s series on the Future of Insurance.

Dr. Henna Karna, Managing Director and Chief Data Officer, XL Catlin, answered Carrier Management’s questions about changes in the next decade by focusing on carrier journeys to set up robust data-digital foundations.

Dr. Henna Karna, Managing Director and Chief Data Officer, XL Catlin

Q: What major changes do you see on the horizon for the property/casualty insurance industry in the next 10 years? What will insurance companies, insurance leaders, the industry and its workforce look like in the next decade? What risks will they insure?

Karna (XL Catlin): The agility of more recently stood up companies within our insurance/reinsurance world calls into question the prior perspective that this industry is not innovative or even disruptive due to our regulatory requirements. Like other corporate industries, property/casualty insurance and reinsurance is undergoing a spectrum of data and technology transformations, pushing forward changes in internal processes, customer/client partnerships, products and services, and ways of doing business that are now possible by digital.

“Because they make a customer-centric approach possible, digital capabilities can restore a level of humanizing interaction between large enterprises with the individual touch points that have not been financially lucrative before or manageable with scale in the past.”

Business in general has, in fact, started to migrate to data-digital ecosystems while leaving the world of siloed and hierarchically arranged and distributed information behind. The way business has been conducted for what amounts to the entire lifespan of several generations of workers is now logically obsolete.

To thrive, participants in the insurance industry—and every other industry—must embark upon a transformative journey toward establishing a robust data-digital foundation for every aspect of their enterprises or risk falling behind their competition. Digitally interconnected operations represent the most comprehensive, agile, innovative, creative and emotionally connected way of conducting business.

At the same time, this macroeconomic change makes possible a shift away from selling ever more goods and services to customers and instead focuses on adding the value those customers want and need—at the time of their want and need. Because they make a customer-centric approach possible, digital capabilities can restore a level of humanizing interaction between large enterprises with the individual touch points that have not been financially lucrative before or manageable with scale in the past.

In terms of risks, the world of complex risk will grow increasingly intricate, with our customers operating in a hyper-connected digital arena. This will present risks that are both familiar and unfamiliar to us today. As a result, companies—and the insurance industry—will be driven by their expertise in their internal and external data. Our insurance and reinsurance companies will become recognized as “data and analytics companies.” We will see the establishment of connected ecosystems that will advance our use of insights and foresights to drive critical decisions in real time.

Certainly, new risks will emerge for our insurance and reinsurance companies to insure. We have seen a few new risks accelerated with the IoT data and digital technologies. That said, it may be that insuring more variation of risk is more traditional in thought and that helping our customers profile their changing risks is where insurance and reinsurance companies head next.

The more successful companies will be able to change the model of selling insurance to partnering with their customers in a 24/7, bi-directional model to be more relevant to their decision-making on risk mitigation. Conversations will be backed up by historical trends and near-real-time information, tailored more specifically to relevant needs of customers.

“Leaders and managers will need to understand how to self-service, analyze and discern information with speed and accuracy in a digital environment; evaluate trends and benchmarks while they enter the environments (not months later); and calibrate—or even redirect—go-to-market strategies as information becomes visible.”

The workforce will need to have not only insurance and reinsurance expertise but also data and analytics expertise. Data entry will become nearly obsolete with the minimalist approach of human oversight. Data-driven insights and augmented intelligent information will become essential training for all levels within our companies.

Leaders and managers will need to understand how to self-service, analyze and discern information with speed and accuracy in a digital environment; evaluate trends and benchmarks while they enter the environments (not months later); and calibrate—or even redirect—go-to-market strategies as information becomes visible.

Our firms will be much less hierarchical, and there will be leaders at many levels of the organization who are empowered to positively impact the direction of the firm. Data science skills will become staple and organically grown. Career paths will go from ladders to lattices, and [companies] will have a unique opportunity to cultivate innovative data, analytics and technology skills across dozens of new capabilities.

Lastly, we will see our companies become more and more services-oriented as risk engineering, risk mitigation, and both consumer and commercial safety become more central to our value propositions.

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